Sales organization and customers

Sales

We sell our products all over the world, to several thousand customers in more than 150 countries across all continents. LANXESS’s long-standing customer base includes leaders in each of its user industries. We have well-established customer relationships in all sales regions. To meet our customers’ needs, we have set up very flexible marketing and sales structures. We manage our sales throughout the world through 52 companies owned by LANXESS itself. We continually extend our global presence so we are closer to our customers and can better evaluate strategic potential. In countries where we do not yet have our own company, we work with local sales partners.

To keep as close as possible to customers and ensure they receive individual support, each of our business units manages its own sales organization. Another competitive advantage is provided by our 52 production sites in 17 countries. Wherever possible, customers are supplied from production sites in the same region, yielding advantages in terms of time and costs.

In 2013, we expanded our e-business activities in purchasing, sales and logistics. Altogether, more than 800,000 orders and the respective automated follow-up notices were handled as e-business. This capability is provided by the LANXESS one Internet portal and the system-to-system connections via ELEMICA. We will continue to expand this process, which provides benefits for all involved, by adding further partners and technical services. The net sales invoice values accounted for by e-business came to approximately €1.75 billion, an increase of about 4% on the previous year.

Selling costs for fiscal 2013 came to 9.1% of LANXESS Group sales, up 0.7 percentage points on the prior-year level of 8.4%.

The table below shows selling costs by segment over the last five years.

Selling Costs
 
  2009 2010 2011 2012 2013
           
Selling costs (€ million) 530 646 732 763 755
% of sales 10.5 9.1 8.3 8.4 9.1
Breakdown by segment          
Performance Polymers 178 216 262 284 286
Advanced Intermediates 92 122 127 125 126
Performance Chemicals 253 300 320 335 328
Reconciliation 7 8 23 19 15
 

Customers

Because of our broad offering, we have business relationships with a large number of customers all over the world. These customers need an individualized, well-focused approach, which we are able to provide because our sales organizations are managed through the business units. Individual sales and marketing strategies are reviewed on the basis of regular customer satisfaction surveys.

LANXESS serves the following industries in particular: tires, chemicals, automotive, plastics, electronics, agrochemicals, leather and footwear, pharmaceuticals, food, water treatment, construction and furniture.

Shares of Sales by Industry Sector
 
% 2013
   
Tires ~ 25
Chemicals ~ 15
Automotive ~ 15
Agrochemicals ~ 10
Construction, electrical/electronics, leather/footwear ~ 20
Others (cumulative share) ~ 15
 

In fiscal 2013, our top ten customers accounted for about 24% of total sales (2012: 26%). None of our customers accounted for more than 10% of Group sales. 57 (2012: 50) customers accounted for annual sales in excess of €20 million.

The number of customers in each segment varied widely. The Performance Polymers segment had some 3,500 customers in 2013 (2012: 3,300), while Advanced Intermediates and Performance Chemicals had about 3,000 (2012: 3,000) and 11,600 (2012: 11,800), respectively. This information is based on the number of customer accounts in each segment. Each segment includes all customer groups and sales categories. However, one customer may do business with more than one segment.

The comparatively low sales per customer in the Performance Chemicals segment, as well as its broad customer base, reflect the way in which its business often involves custom-tailored solutions in specialty chemicals. By contrast, the substantially lower number of customers in the Performance Polymers segment, which nonetheless generates relatively high sales, is typical of the synthetic rubber products business. On account of the extensive customer base, no segment can be considered dependent on just a few customers.